Friday morning headlines

Stocks gain: Not an especially strong rally, but the better-than-expected job news is providing some lift. Dow is up about 40 points.

State AG still open to mortgage deal: Kamala Harris dropped out of settlement discussions with the big banks, but a source tells the WSJ that she would be open to a deal if it involves "a stronger proposal" from lenders. Government officials continue to meet with the banks.

The two sides made progress on several issues this week, nearly completing work on proposed servicing standards and moving forward on an enforcement mechanism for the deal, people familiar with the matter said. But no agreement has been reached on some of the most divisive issues, such as the extent to which banks should be released from additional legal claims.

Gas prices keep dropping: It's the fourth straight week of declines, according to the Auto Club, though the average price of regular in the L.A. area, $3.816, is still stubbornly high compared with the relatively low price of oil.

Feds targeting pot dispensaries: Still lots of confusion about the federal crackdown on operations in California. News conference is set for this morning. From the LAT:

The stepped-up enforcement escalates the Obama administration's efforts to rein in the spread of pot stores, which accelerated after the attorney general announced in 2009 that federal prosecutors would not target people using medical marijuana in states that allow it. "It's coming out of left field as far as we're concerned," said Joe Elford, the chief counsel for Americans for Safe Access, which advocates for medical marijuana use. "I really don't know what inspired this. It's a complete about-face from what [Obama] said when he was campaigning."

Bloomberg not happy with NY protesters: He says they're eating into the city's finances (police overtime for one thing) and that runs the risk of new layoffs. (Business Insider)

State insurance fund plans layoffs: Up to 1,800 workers are expected to be let go of the government-controlled State Compensation Insurance Fund, about a quarter of the workforce. (LAT)

Deadline looms on "Simpsons" pay cuts: Actors on the show are being asked to take a huge pay cut, though they would still be making $250,000 per episode. The actors offered last week to accept cuts to $300,000 per episode, in exchange for back-end payments. (The Wrap)